Yue Xiu Enterprises, an investment arm of Guangzhou’s municipal government, raised $200 million on Monday from the sale of an exchangeable bond into Hong Kong-listed subsidiary Yuexiu Transport Infrastructure.
The deal, which benefited from a guarantee by the parent, monetises a 20% appreciation in the infrastructure company’s share price during the past month and was priced at the investor-friendly end of the range with a 1.5% coupon and 10% conversion premium.
Yue Xiu wanted to achieve a certain pricing target, according to a banking source, which led to a slightly unusual structure a five-year maturity and a two-and-a-half-year put six months less than is standard...
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